[Marxism] Walmart and Costco

Carlos A. Rivera cerejota at optonline.net
Wed May 4 20:19:04 MDT 2005

----- Original Message ----- 
From: "Marvin Gandall" <marvgandall at rogers.com>

> Is Costco unionized?

Already answered. 13%. Which is the average.

> If it isn't, you wouldn't expect pay/benefits to
> (voluntarily) be so much higher than at its chief rival. It competes in 
> the
> same markets, doesn't it?

Not exactly. Costco serves a market niche covered by a Walmart divison, but
doesn't compete in general retail.

"Sam's Club" is the Walmart-owned direct competitor to Costco (both are

They both are oriented towards the huge small/micro business market, and to
high middle-class suburbanites, in particular high-consumption households, 
and are both a hybrid of warehouse/retail sales.

Costco also has a webshop, yet this can't be compared with Walmart's as, W's 
sells stuff from all of their stores, not just Sam's Club.

Interestingly enough, "Sam's Club" pays an average $12 an hour to their 
employees (according to the same NYT article), which is quite higher than 
what they pay Megastore and other employees.

BTW, I worked in "warehouses" (stores) for both in Puerto Rico some years 
ago (man, I got pumped!), and I earned $5.70 per hour at Sam's, $8.55 
sundays and graveyard, and $7.00 at Costco, $14 sundays and graveyard. When 
Cotsco opened in PR, within a month the main Sam's Club in Bayamon had to 
close for a week because every single member, from managers down had quit to 
go to Cotsco, and still Sam's insisted in paying less.

Nevertheless, there are more Sam's Club stores than Costco's in PR.

>What about the relative earnings and market share
> of the two companies?

Both have "Investor Relations" websites.



> How does Costco withstand the inevitable pressure from
> its investors - I assume it's publicly traded - to bring its labour costs
> more into line with Walmart?

Actually, on average Costco has a higher ROI on dividends than Walmart, 
although slightly so, something like it would take you 383 years to get your 
money back from Walmart at current levels vs 382 with Cotsco. ;-)

Yet, and I think this is what is behind the NYT article, there is a growing, 
post-Enron, movement within USonian capitalists to transform the US economy 
into a more "European" model.

It seems to me that these investors and capitalists, the income gap as it 
stands today in the USA is seen as something that robs the consumer economy 
of spending capital (when was the last time a CEO brought a cheap TV?) and 
hence eliminates the "middle class", creates low dividends in the stock 
market (dividends appeal to risk-averse, middle class investors), makes the 
USA relaint on cheap "outsourced" labor for consumer goods to make up for 
weak salaries, and in general is to blame for the USA being the only advance 
capitalist country that owes more than what is owed to itself.

 Its not that they want economic parity, but they want less difference in 
order to guarantee their profits and the continued economic health of the 

You could call them, on a whim, a sort of neo-Keynesians, and they are 
taking over business. American Apparel comes to mind, as does how Toyota is 
run in the USA (only car people re-investing in the USA).

I think Costco represents the section of US capitalism that stands in 
opposition to the oil economy and the deformative process it has generated 
in US hegemonic pretentions. And its true, if the US economy doesn't go 
costco, goodbye labor aristocracy, hello Soviet-like fall.


"Wow And Flutter" (Stereolab)

I didn't question I didn't know
As far as I'd seen life was endless
When I realised I had to let go
We are mere mortals
As to the rest
It's not eternal, imperishable
While on the move
It's not eternal, interminable
Progress is the clue

I though IBM was born with the world
The US flag would float forever
The cold opponent did pack away
The capital will have to follow
It's not eternal, imperishable
Oh yes it will go
It's not eternal, imterminable
The dinosaur law

Look at the symbols, they are alive
They move evolve and then they die.

More information about the Marxism mailing list